The FDA said it might yet approve Contrave if Orexigen did
another clinical trial on the drug's cardiovascular risks.

Orexigen thus becomes the third company in less than a year to
experience rejection shock for its obesity drug; San Diego's Arena
Pharmaceuticals and Mountain View's Vivus Inc. suffered the same
fate last year. And health concerns were cited by the FDA in both
those rejections as well.

"We are surprised and extremely disappointed with the Agency's
request in light of the extensive discussion and resulting vote on
this topic at the December 7 Advisory Committee meeting," Michael
Narachi, President and CEO of Orexigen,
said in an Orexigen press release
. "We plan to work closely
with the Agency to gain more information to determine the
appropriate next steps regarding the Contrave application."

Here's more from an Associated Press story on the rejection:

Narachi said the company wants to gather more specific
information on what the FDA is seeking. But he acknowledged that
studies of the kind requested by the FDA are normally "fairly
large."

"It's safe to say we would need additional capital," he
said, in a conference call with investors.

Analysts have viewed Contrave as the most promising of three
new diet pills recently submitted to the agency. Contrave is a
combination pill, mixing an antidepressant with an anti-addiction
drug to curb appetite. Four out of 10 patients taking Contrave for
a year lost at least 5 percent of their body weight. Those results
narrowly met FDA's guidelines for effectiveness.

La Jolla, Calif.-based Orexigen does not currently have any
products on the market, making Contrave a key to the company's
growth and survival. In pre-market trading Tuesday, Orexigen shares
tumbled $6.67, or 73 percent, to $2.42.

Analysts expect any obesity drug reaching the market to have
the potential to become a billion-dollar seller.

With the U.S. obesity rate for adults nearing 35 percent,
the FDA has acknowledged the need for new weight loss drugs. But
the agency rejected two other drugs last year due to safety risks,
a long-standing issue that has plagued weight loss treatments for
decades. Those drugs were made by fellow California drug developers
Vivus Inc. and Arena Pharmaceuticals Inc. Both companies have said
they plan to resubmit their drugs for approval.

Contrave has been pegged as a more promising treatment
because of its relative safety. Unlike the other two drugs reviewed
last year, it received a positive vote from the FDA's panel of
outside advisers, who voted 13-7 that the drug's modest weight loss
benefits outweighed its risks.

But the FDA meeting assessing the drug was not free of
criticism. FDA scientists and safety advocates complained that the
company enrolled few elderly patients or patients with a history of
heart disease in its trials, making it difficult to determine the
drug's safety in patients who are likely to need it most.

Heart side effects have been an issue with diet drugs, most
notably with Wyeth's diet drug combination fen-phen, which was
pulled off the market in 1997. In October, Abbott Laboratories
withdrew its drug Meridia after evidence it increased the risk of
heart attack and stroke.

Currently there is just one prescription drug on the market
for long-term weight loss: Roche's Xenical, which is not widely
used. Several other generic drugs are approved for short-term
weight loss, including phentermine.